Day Two at TradeTech West and traders continue to see an issue around Commission Sharing Agreements (CSAs) held at Lehman and possibly Merrill Lynch.

Justin Kane, Director of Equity Trading at Rainier Investment Management, says, "I think this underscores the risk of holding CSAs with bulge-bracket brokers that could be at risk of going out of business."

He adds, "I think this should cause firms to take a look at the value proposition that the agency-only brokers that have CSAs offer. You're not going to be at risk of losing your kitty—the money you've put into the CSA pool."

Kane explains if a buy side firm had a significant amount of money in a CSA pool with a broker-dealer and it went under, it would be detrimental to that buy side firm, particulary if the broker had not yet paid out commission dollars to their smaller brokers. "Those commission dollars may not be recoverable or they may be wrapped up in litigation for a while. It could be a pretty high risk to client commission dollars."

Kane says that the full implication of the current situation is yet to be assessed and he will be heading back to his desk to get feedback from his portfolio managers and insight into how it will affect his firm. "We could have some large effects on the research side and the trading side," he explains.

Matt Samelson, Senior Analyst at Aite Group was also on hand at today's event and offered up that he has never seen anything like the turmoil that Wall Street is currently facing. "It's definitely unsettling," Samelson says. "The underpinning of a solid economy is efficient capital markets."

He says that obviously the capital markets will continue to exist and that regulation and technology will drive changes going forward. Regulation will enable more discreet, smaller scale changes while technology will help usher in continuous change to keep the markets moving forward.

"This may be viewed as a speed bump, but in general what we do everyday won't change very much," says Samelson.